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Stone Arch Lofts mold problem could cost $1 million to fix

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May 28, 2002 // UPDATED 1:21 pm - April 30, 2007

By: David Brauer and Ellen Nigon

David Brauer and Ellen Nigon

Some of the Downtown riverfront's most expensive real estate has been undergoing a pricey fix. More than half of the 35 units at the Stone Arch Lofts, 600 S. 2nd St., are afflicted with mold, says Peggy Lucas, a principal with Minneapolis-based Brighton Development. Lucas said fix-up costs at the condominium complex may total $1 million "by the time we pay off all the ancillary stuff," including relocating some tenants for several months.

According to Lucas, since last fall, 19 units in the Lofts -- which opened in July 2001 at prices from $400,000 to over $1 million -- have been found to have mold contamination. Eight of the units required moldy sheetrock and ductwork to be torn out; the rest required cleaning and disinfecting. Some buckled floors had to be re-sanded.

By this March, all tenants in those units were moved to the nearby Hyatt Whitney hotel or the Residence Inn while the work was being done. "If it had to happen, they're taking good care of us," said tenant Sherry McPhillips, who along with her husband now lives in the Residence Inn.

Lucas termed the mold "a benign, non-harmful mold. It goes away when things dry out. Our tests showed there was much less mold in the building than the air you breath outside. But mold is like the new asbestos, so we had to clean it up. "

McPhillips said she does not fear health consequences. "It's not that big a deal. My husband is highly allergic to any of that stuff and we lived there until we moved [to the Residence Inn in March]."

However, Laura Oatman, supervisor of the Minnesota Department of Health's Indoor Air program, challenges the "benign" assessment: "The position we take is that regardless of whether individuals are experiencing health problems, that mold could be a health hazard."

Among Oatman's reasons: while not all mold is harmful, it can excrete chemicals that make it easier for harmful molds to develop. "Just because you tested it today that doesn't mean you'll have the same mold three months from now."

State law does not require mold contamination be reported to public health authorities. Brighton's Lucas said her company used private consultants to evaluate health risks.

The Health Department's Oatman praised Brighton's fix-up. "The good news is that [Brighton] is doing the right thing -- cleaning or replacing the hard surfaces."

McPhillips said developers told her that the building's ventilation machinery, known as an air make-up system, was too small.

Lucas said only that the parties -- including construction company Kraus-Anderson and building engineers -- "haven't agreed on who is responsible. But Brighton and Kraus-Anderson are stepping up to fix the problem because it's about making it right for these folks."

Lucas added, "There's a pretty good consensus that the mold problem was a combination of things. We had that very humid period last summer, at the same time the building was drying out. The concrete, the paint, the drywall -- I never realized all the drying out a building has to do. The building needs to sweat, and it got all sweaty inside."

Lucas said tenants are beginning to move back into their units. All are expected to be back this summer, she said.

According to Lucas, the nearby Washburn Lofts and North Star Lofts -- which share three floors of parking with the Stone Arch Lofts -- are not affected by mold contamination.

The Stone Arch Lofts project was financed in part with $2.6 million in public funds for environmental clean-up and historic renovation. Minneapolis Community Development Agency senior housing project coordinator Donna Wiemann said the mold cleanup is a private responsibility that doesn't require public money.

Lucas said Brighton had built several thousand units and never had a mold problem. "I can guarantee it will never happen again," she vowed, declining to specify future precautions that Brighton will take.